What Counts and for Whom? October 11, 2005 Alan S. Hejnal
Outline The difference between Financial/Management Reports and Recognition Reports Financial/Management Reports CAE Voluntary Support of Education Survey CASE Campaign Report IRS Form 990 Schedule B (Major Contributors) Recognition Reports Honor Roll of Donors October 2005 CASE Gift Processing Workshop 2
The Problem Some gifts are easy Mr. Sherlock Homes makes a cash contribution of $5,000 to the music program. You recognize Mr. Holmes as a $5,000 donor, and record $5,000 in the music program fund. October 2005 CASE Gift Processing Workshop 3
The Problem However, some gifts are more complicated More than one donor may be associated with a gift, in different capacities Mr. Bob Cratchit makes a gift of $500 to the medical school, jointly with Mrs. Cratchit. The gift is matched 2-to-1 by Bob s employer, Scrooge and Marley. You want to recognize Bob Cratchit as a $1,500 donor, his wife as a $1,500 donor, and Scrooge & Marley as a $1,000 donor. At the same time, you only received a total of $1,500! October 2005 CASE Gift Processing Workshop 4
Two Basic Kinds of Reports Financial/Management Reports The most important thing is to get the dollars right Each gift is counted exactly once Used to answer questions like: How much money has the campaign raised? How much has been raised for the new library? How large a charitable contribution did a donor make for federal income tax purposes? October 2005 CASE Gift Processing Workshop 5
Two Basic Kinds of Reports Financial/Management Reports (cont d.) Secondarily, may be interested in dividing that up by donors, donor categories How much money has the campaign raised from alumni? How much has been raised for the new library, by donor type?? To ensure that each gift is counted exactly once, gifts are typically attributed to the legal donor October 2005 CASE Gift Processing Workshop 6
Two Basic Kinds of Reports Financial/Management Reports (cont d.) Music Program $5,000 Medical School $1,500 Total $6,500 October 2005 CASE Gift Processing Workshop 7
Two Basic Kinds of Reports Financial/Management Reports (cont d.) Music Program Individuals Mr. Sherlock Holmes $5,000 Medical School Individuals Mr. Bob Cratchit $250 Mrs. Cratchit $250 Corporations Scrooge & Marley $1,000 Total $6,500 October 2005 CASE Gift Processing Workshop 8
Two Basic Kinds of Reports Recognition Reports The most important thing is to get the people (or other donors!) right A gift may be counted more than once Used to answer questions like: Who has already contributed to the Annual Fund this year? Who are the donors who we need to invite to the dedication of the new library? Who do we recognize as donors of $100,000 or more to the capital campaign? October 2005 CASE Gift Processing Workshop 9
Two Basic Kinds of Reports Recognition Reports (cont d.) Gold Medal Donors ($5,000 or more) Mr. Sherlock Holmes $5,000 Silver Medal Donors ($1,500 to $4,999) Mr. and Mrs. Bob Cratchit $1,500 Bronze Medal Donors ($1,000 to $1,499) Scrooge & Marley $1,000 October 2005 CASE Gift Processing Workshop 10
CAE Voluntary Support of Education (VSE) Survey The basics Standard reporting intended to allow comparisons between institutions Reports gifts raised in one fund-raising year Reports on a cash basis Counts only what is actually received Pledges are not included Pledge payments counted when they are received October 2005 CASE Gift Processing Workshop 11
VSE Survey In the financial/management category Gifts are reported according to their legal (hard-credit) donors Gifts are classified by donor category (Alumni, Parents, Corporations, etc.) and by purpose (Unrestricted, Restricted for Financial Aid, Restricted for community Service, Endowment, etc.) October 2005 CASE Gift Processing Workshop 12
VSE Survey Several versions Three versions for higher education Two versions for pre-collegiate schools The minimal survey asks for limited detail but all the key data. October 2005 CASE Gift Processing Workshop 13
What s in the VSE Survey? Optional Pledge Section, not counted on the main survey Basic Finances and Enrollment Data Current Operations Contributions Outright Capital Purpose (endowment, buildings and other property, loan funds) Deferred Giving Follow-up questions to the above in separate sections, including counts of alumni and of alumni donors October 2005 CASE Gift Processing Workshop 14
VSE Survey What Counts? Gifts and grants to your institution, both for current operations and for capital purposes, regardless of form (cash, products, property, securities, life insurance contracts, etc.); Gifts and grants to affiliated foundations and organizations created to raise funds for the institution; Securities, real estate, equipment, property or other non-cash gifts, to be evaluated at the fair market value placed on them by an independent appraiser, not the cash income there from; Deferred gifts; Cash value of life insurance contracts; Cash payments returned as contributions from salaried staff; Insurance premiums paid by donors. (VSE Survey Instructions) October 2005 CASE Gift Processing Workshop 15
VSE Survey What Doesn t Count? Governmental funds Advertising revenue Contract revenue, including sponsored research Contributed services Investment earnings Student financial aid or other support directed to a specified individual The non-deductible portion of quid pro quo contributions Gifts from an affiliated foundation or organization (these are counted when received by the affiliate) Pledges Bequest intentions October 2005 CASE Gift Processing Workshop 16
VSE Survey Donor Categories Alumni further categorized as 1. Undergraduate degree holders 2. Graduate-only degree holders 3. Completed some credit, but no degree Undergraduate degree takes precedence October 2005 CASE Gift Processing Workshop 17
VSE Survey Donor Categories Parents Grandparents (pre-collegiate schools only) Other Individuals (Bequests are counted according to the category of the individual who made the bequest.) October 2005 CASE Gift Processing Workshop 18
VSE Survey Donor Categories Individuals may fall into more than one category, i.e. may be both alum and parent Alum takes precedence over parent Parent category, then, doesn t include all giving from people who are parents This is typical of financial/management reports that break down by category (faculty/staff giving may raise similar issues) October 2005 CASE Gift Processing Workshop 19
VSE Survey Donor Categories Foundations Corporations Includes Corporate Foundations Religious Organizations Fund-Raising Consortia Other Organizations Includes Donor-Advised Funds October 2005 CASE Gift Processing Workshop 20
VSE Survey Alumni Participation Alumni of Record living alumni for whom you have a good address (or other way to contact) Alumni Solicited contacted in some formal manner (mail, phone, visit, etc.) during the year Alumni Donors made one or more contributions during the year Gifts from alumni couples qualify both spouses as donors Includes all giving current, capital, and deferred October 2005 CASE Gift Processing Workshop 21
CASE Capital Campaign Survey The basics Standard reporting intended to allow comparisons between institutions Reports gifts committed as part of a multi-year campaign Only report publicly announced campaign Reports on a commitment basis Pledges are included, along with outright gifts October 2005 CASE Gift Processing Workshop 22
Campaign Survey Again, in the financial/management category Commitments are reported according to their legal (hard-credit) donors Gifts are classified by donor category (Alumni, Parents, Corporations, etc.) and by whether the commitments are outright or deferred October 2005 CASE Gift Processing Workshop 23
Campaign Survey Fundamental Principles Only gifts and pledges received or committed during the identified time period should be counted (including lead gifts during the advance-gifts phase, which is part of the reported campaign time period). Gifts and pledges may be counted as part of only one campaign. The balance of cancelled or unfulfilled pledges must be excluded when it is determined that they will not be realized. October 2005 CASE Gift Processing Workshop 24
Campaign Survey Time Periods Campaign Period Active solicitation period, including advancedgifts or silent phase CASE recommends no campaign period exceed seven years Pledge-Payout Period Period in which donors may fulfill pledges Should not exceed five years October 2005 CASE Gift Processing Workshop 25
What s in the Campaign Survey? Campaign Goal, Scope, Period, and Policies Basic Institutional Data Total of outright gifts and pledges received, reported at face value Total of deferred (future) commitments, reported at face value Total of deferred (future) commitments, discounted to present value Follow-up questions including largest gifts, donor counts, alumni participation, board participation October 2005 CASE Gift Processing Workshop 26
Campaign Survey What to Count? Outright Gifts transferred irrevocably to the institution (or institutionally related foundation) Deferred gifts when assets are irrevocably transferred to the institution, or, in cases where no assets are transferred, when the donor executes a legally binding irrevocable deferred instrument Verifiable unconditional pledges committing to a specific dollar amount over a specified period (not to exceed five years) October 2005 CASE Gift Processing Workshop 27
Campaign Survey What Doesn t Count? Governmental funds Advertising revenue Contract revenue, including sponsored research Contributed services Investment earnings Alumni membership/dues Student financial aid or other support directed to a specified individual The non-deductible portion of quid pro quo contributions Gifts or pledges, outright or deferred, already counted in a previous campaign, even if realized during the campaign reporting period Bequest expectancies that are revocable or legally unenforceable (new) October 2005 CASE Gift Processing Workshop 28
Campaign Survey Donor Categories Alumni Parents Other Individuals Foundations Corporations Religious Organizations Fund-Raising Consortia Other Organizations October 2005 CASE Gift Processing Workshop 29
Internal Campaign Reporting Internal campaign management reports may apply different standards Suppose one of your campaign objectives is to build a $10 million performing arts center. You intend that $3 million of that goal will come in the form of state grants. To evaluate where you are toward the $10 million goal, your internal report might include governmental commitments. But you d exclude those when reporting to CASE. October 2005 CASE Gift Processing Workshop 30
Internal Campaign Reporting It s probably a good idea for even internal reports to follow CASE guidelines as closely as possible. CASE campaign guidelines are intended to help keep campaign reporting meaningful, and to help avoid inflated or otherwise unrealistic totals October 2005 CASE Gift Processing Workshop 31
IRS Form 990 Schedule of Contributors The basics Form 990 is the tax return for a non-profit Includes information about charitable contributions to the organization Reports gifts received in one reporting year Reports on a cash basis Counts only what is actually received Pledges are not included Pledge payments counted when they are received October 2005 CASE Gift Processing Workshop 32
IRS Form 990 Schedule of Contributors In general, lists donors of $5,000 or more during the year Only considers individual gifts of $1,000 of more in identifying these donors Includes total of cash and non-cash gifts Includes descriptions of non-cash gifts by these donors October 2005 CASE Gift Processing Workshop 33
Recognition Reporting Recognition reporting focuses first and foremost on the donors, not on getting the dollars to add up! More than one donor may be credited for a gift. Goal is typically to recognize everyone involved with a gift, regardless of whether they were the legal donor October 2005 CASE Gift Processing Workshop 34
Honor Roll of Donors Recognizes donors who gave during some period, or as part of some initiative Annual Giving Honor Roll Capital Campaign Honor Roll Reunion Giving Honor Roll Athletic Giving Annual Honor Roll October 2005 CASE Gift Processing Workshop 35
Honor Roll Issues Not subject to standards, the way that CAE & CASE reporting, financial reporting, gift receipting, etc. are Variety of practices among institutions Good idea to think in terms of what you re trying to accomplish with the honor roll Make donors feel appreciated Encourage current (and future!) giving Be generous with recognition! October 2005 CASE Gift Processing Workshop 36
Honor Roll Issues Annual Honor Roll Typically produced after the fund-raising year is complete May want to include only completed gifts, and not outstanding pledges May want to acknowledge number of consecutive years of giving Goal is to get donor to give every year October 2005 CASE Gift Processing Workshop 37
Honor Roll Issues Campaign Honor Roll Typically produced after the active solicitation phase, but before the pledgepayment period is complete Probably want to include outstanding campaign pledge balances Goal is to get donor to make a substantial, multi-year commitment October 2005 CASE Gift Processing Workshop 38
Honor Roll Issues Joint gifts May want to give both spouses credit, and list both spouses Nick & Nora Charles make a joint gift of $5,000. They appear jointly in the Gold Medal Donors listing. In addition, if they are alumni in different classes, they appear individually in their respective classes, as Gold Medal Donors. October 2005 CASE Gift Processing Workshop 39
Honor Roll Issues Gifts from a family foundation, familyowned business, donor-advised fund, etc. May want to give credit to, and list, the individual(s) who were involved in, or responsible for, the gift to your organization October 2005 CASE Gift Processing Workshop 40
Honor Roll Issues Gifts from a family foundation, family-owned business, donor-advised fund, etc. The Stuyvesant Museum of Natural History receives a $1,000,000 gift from the Carlton Random Family Foundation, as a result of the interest of Ms. Susan Vance, a Foundation Trustee. The donor plaque on the Dinosaur Hall recognizes the generosity of both the foundation and Ms. Vance. October 2005 CASE Gift Processing Workshop 41
Recognition Reporting Issues Matching Gifts Should you include matching gifts in determining a donor s gift club level? Argument against: Not every donor is eligible for a match. Not including matches treats all donors more fairly. Argument for: If the donor does not apply for the match, we don t receive the matching funds. We want to provide the donor the strongest possible incentive to apply for the match. October 2005 CASE Gift Processing Workshop 42
Recognition Reporting Issues Special Recognition Events Suppose you re dedicating a building, and want to invite the donors who made it possible. Who do you invite? People who were responsible for gifts through family foundations, family businesses, donoradvised funds, etc.? Surviving spouses of deceased donors? Children of deceased donors? It s not just Who wrote the check? October 2005 CASE Gift Processing Workshop 43
In Conclusion There are many different reporting needs. We ve only touched on a few here. Two good rules of thumb: Is this a standards-based report, with rules specified by the report recipient, or by legal or professional requirements? What is the report recipient trying to accomplish with this report? October 2005 CASE Gift Processing Workshop 44
Questions (& Answers?) October 2005 CASE Gift Processing Workshop 45
Contact Information Alan S. Hejnal Director, Advancement Services Gettysburg College 300 N. Washington St., Campus Box 423 Gettysburg, Pennsylvania 17325 Voice: 717-337-6509 E-Mail: ahejnal@gettysburg.edu October 2005 CASE Gift Processing Workshop 46